Software Appliances: A New Profit Generator for VARs?

From all appearances, the economy is improving. With people and businesses alike putting their money back to work, where are you going to put you

February 14, 2011

3 Min Read
Software Appliances: A New Profit Generator for VARs?

By Novell Guest Blog 2

software appliances

From all appearances, the economy is improving. With people and businesses alike putting their money back to work, where are you going to put yours? I suggest investing your money and efforts where they will pay the highest returns—for both you and your customers’ businesses. One area of intrigue: A lot of independent software vendors (ISVs) are investing in software appliances and the tools to build them more efficiently. Here's why.

The software appliance market is forecast to break the $1 billion threshold by 2011 and grow to $3.7 billion by 2014. IDC attributes this fast growth to the fact that software appliances reduce acquisition costs and increase operational efficiencies thanks to zero integration and simplified management.

So what is a software appliance? It typically includes a specific application — like email, groupware, CRM or ERP software — tightly integrated with an operating system like Linux. The software appliance approach eases customer configurations and speeds deployments. In a study of five ISVs participating in the SUSE Appliance Program, IDC found that, with minimal investment, these ISVs recognized an average ROI of 566 percent and an average payback of less than seven months.

Among the study highlights:


  • A more efficient development platform enabled these ISVs to deliver new applications in 68 percent less time and at 62 percent lower cost on average.

  • By simplifying proofs of concept, getting to market quicker, reaching new customers and improving close rates, their revenues grew 14 percent.


Channel Partner Opportunity

With ISVs capitalizing on the potential of software appliances, there’s no reason that other channel partners can’t be doing the same. Solution providers can easily package customer workloads into software appliances to deliver greater value to their customers while boosting revenues with a new set of services. Solution providers can also use software appliances to bundle their own solutions and extend existing applications to the cloud, shortening sales cycles, simplifying deployment and driving down support and development costs.

Companies of all sizes are discovering new opportunities to leverage the value and versatility of software appliances. Two recent examples that I’m aware of include SAP and Dell.

SAP now delivers the enterprise-class teamwork capabilities of its StreamWork Enterprise Edition products using software appliances. In fact, it’s the only way SAP offers this product to customers.

Hardware giant Dell is always looking for ways to optimize development and software deployment processes. Like SAP, Dell recently standardized on SUSE Linux to build, deploy, maintain and manage its entire family of Dell-branded appliances.

Now my point isn’t that Novell solutions are the only way to do this; it’s that software appliances are transforming the way solution providers of all types package and distribute software offerings. Today, they can quickly deliver existing applications to physical, virtual and cloud computing environments, reduce sales cycles and pursue new markets.

Novell makes this possible through the SUSE Appliance Program, which gives solution providers and ISVs access to specialized pricing, redistribution agreements, certification and support programs—in other words, everything you need to build, test, update and go to market with software appliances. Whether you are helping customers move workloads to the cloud or adopting appliances into your own service provider offerings, software appliances are proving to be a very efficient way to achieve these goals—and realize significant ROI in the process.

Note: The IDC statistics above are from an IDC white paper, published in January 2011, titled "The Return on Investment of SUSE-powered Software Appliances from Novell."

Dan Dufault is global director of partner marketing at Novell. Guest blogs such as this one are part of The VAR Guy’s annual sponsorship program.

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